Shoppers went to several of their favorite stores and found impressive bargains, but didn’t necessarily spend much.

More stores, including office supply stores, opened in the early evening on Black Friday Eve.

Shoppers made an effort to avoid shopping for the entire day as a protest. They were protesting commercialization in general, extended store hours, a department store’s inclusion of captive marine mammals in a parade, or the street shooting in Ferguson. One mall closed completely for the day to avoid protestors.

Reports of a boom in gun sales, the biggest day ever by some counts, with firearms being seen as more useful after the decision not to indict the Ferguson shooter.

Walmart workers were on strike.

Shoppers who wanted to avoid the crowds made all their purchases online.

Shoppers said they had finished their shopping either before Black Friday started, or early in the day.

There was heavy highway and street traffic in shopping areas.

I saw a 100-car backup approaching an automobile dealer’s tent event.

The first big attempt at Black Friday in the United Kingdom was marred by pushing and shoving and other incidents of in-store violence.

Shoppers said lower gasoline prices might make them spend more freely.

Snow on the ground in wide areas might have reminded shoppers that Christmas is coming.

In my case, it was a busy day with little time for shopping. I spent perhaps 15 minutes in stores shopping, but didn’t buy anything. It is hard to say at this point what this year’s Black Friday indicates, but retailers counting on a single day of sales to put them in the black must be feeling a little let down this morning.

Sunday, November 23, 2014

Here is a sign of the times, something I came upon during my holiday shopping: a power strip that provides 2 USB charging outlets along with 4 grounded electrical outlets (made by Inland and seen in the Micro Center catalog). It makes sense as a product. If you are using several outlets at one place, there is a good chance that one of the things you are doing is charging a portable device. The USB charging port is the only well-accepted standard connector for this purpose. This combination device costs noticeably less than the combination of a power strip and a USB cube that you would otherwise deploy. Next, as the USB charging port becomes more common we may see it used for purposes other than charging, that is, to power devices such as musical instruments. This may be a bit of a design challenge. Most such devices require a higher voltage or more power than the USB charging standard provides, but the cost savings might be enough to nudge designers to make a device work with half the voltage or half the power so that it can fit within the limits of the standard.

Friday, November 21, 2014

Accused: Prosecutors in Belgium say HSBC is involved in steering clients toward tax evasion vehicles in Switzerland. Belgium is thought to have missed out on probably less than €1 billion in tax revenue because of the bank’s tax evasion schemes. A similar investigation is underway in France, the bank says. Separately, prosecutors in France are looking into reports of insider trading by executives at BNP Paribas.

Layoffs: Royal Bank of Canada (RBC) is closing its offshore banking operations in the Caribbean and closing some other wealth management offices. A published report estimates 300 job cuts.

Seeking capital: Lorain National Bank in Lorain, Ohio, is seeking a buyer and expects to close a sale before the end of the year. The bank took large losses that started in 2007 but received a federal bailout, repaid in 2012 when the bank returned to profitability. It has $1 billion in deposits.

A Senate bill would require the president of the New York Fed, one of the country’s most powerful financial regulators, to be nominated by the U.S. President and confirmed by the Senate. The move comes as policymakers review evidence that the New York Fed is effectively owned by the Wall Street banks it is supposed to supervise.

Wednesday, November 19, 2014

In my last post I mentioned nanotechnology as one avenue being explored as a way to make batteries that recharge faster. I may have misled by failing to mention a completely different approach that is on the way, perhaps sooner than nanotech batteries. If you imagine an electric battery that is recharged not by adding electricity but by putting in fuel, then what you have is a fuel cell. The consensus of engineers is that the fuel of choice is hydrogen gas, resulting in a term I am sure you have heard, a hydrogen fuel cell. Despite the different name and some differences in the construction, a fuel cell puts out electricity in essentially the same way a battery does. Hydrogen fuel cells have been around for years and have been much talked about, and now, the first mass production fuel cell cars are on the way next year. The first hydrogen fuel cell cars will cost about the same as a comparable battery-powered electric car, and surely within a few years we will have a good sense of how well fuel cell cars are doing.

Tuesday, November 18, 2014

The widespread use of electricity to power vehicles depends on making the batteries less expensive, lighter, and perhaps more durable. For the past decade, the big push in battery technology has been toward improvements in materials that increase the electrical capacity of the battery without adding too much to the manufacturing costs or weight or losing anything in reliability. The improvements, though, haven’t been coming in as fast as had been hoped, and now some researchers are looking in other directions. One thought that is showing some promise is the idea of reducing the time to recharge a battery. If the battery recharges faster, then for many applications including cars, the capacity of the battery becomes less critical.

A shorter recharge time fundamentally means a smaller cell size. Cells are the chemical components inside a battery that store electricity, with at least three layers of different materials chosen for their contrasting electrical properties. A simple battery may contain only cell, a lead-acid car battery, six cells. What if you made a battery with millions of tiny cells? With smaller cells, the distance from the middle of the cell to the edge is smaller, and that should make it possible for the battery to charge faster.

Prototypes prove this works in practice, but it is an immense manufacturing challenge to make so many small cells quickly, so that the manufacturing costs are low enough to be practical. The answer might be found in recent advances in nanotechnology. Nanotechnology creates a range of small devices by getting materials to go together consistently on a small scale.

Wendy Koch writing in National Geographic explores the nanotech side of batteries in a new story:

Monday, November 17, 2014

In looking at the latest GDP report from Japan, which shows a second quarter of declining output, it is hard to avoid the effect of the sales tax, an unfamiliar 7 percent tax that seems to have sapped consumers’ courage. After the tax was put into place, consumer spending edged up only slightly in nominal terms, which means the amount of stuff people are buying is quite a bit less than before. It’s not a surprise if shoppers feel a new reluctance after the price of essentially everything jumped up. Price-conscious shoppers have to wonder what to buy; income-conscious shoppers wonder what they can afford.

It is important also not to overstate the impact of the sales tax. There were weather disasters during the quarter that gave a reason for caution. Storms temporarily took out transportation and electricity in some places. All in all, the downturn should not be taken as a trend.

It is also possible to look deeper. The reason for the harsh new tax policy is a government debt large enough to destabilize the national economy. Reducing the debt is a valuable course of action even if it is not so easily taken. Behind the government debt one may find a messy network of indirect subsidies that have gone in many directions, most especially in the direction of nuclear power. This created a financial hole that the country has to dig out of, and sooner is better than later.

Sunday, November 16, 2014

It is shaping up to be a big Christmas at retail. I saw a big weekend in the shops October 31–November 2, and from everything I saw and heard locally, this weekend was bigger, with the early afternoon looking almost like a Black Friday. Weather may be a big factor, with weather cold enough last Thursday and Friday in most of the United States to remind people of winter and its holidays, but not snowing in too many places. Gasoline is also a factor that favors shopping, with prices falling below the psychological $3 level in most of the country. This helps shoppers feel good about driving around to local stores for shopping, and it also means they have more money to spend when they get there.

Time pressure is the major factor working against the Christmas shopping season, with no indication I can see that consumer time pressure has diminished since last year. On the other hand, time pressure hasn’t increased much either. My expectation after seeing the foot traffic this weekend is that stores will be talking about the busiest holiday season in eight years, with online sellers also having a reasonably strong selling season.

Saturday, November 15, 2014

It is not just retailers, banks, research and development divisions of manufacturers, and military operations that are targets of well-organized online break-ins. Basic infrastructure is also a target. We’ve seen this in criminal groups’ attempts to collect data from hospitals, email servers, and delivery services. In October, web sites that provide U.S. weather data were a particular target. Jose Pagliery at CNN reported:

Why would criminals want to break in to weather sites, if they did not seem to be altering the weather data itself? I can think of two obvious reasons:

To gain access to connected military servers. Military operations are among the most avid consumers of weather data, and they also provide a small fraction of weather observations, so it seems a likely guess that there might be a data conduit set up between a weather server and a military server. Intelligence organizations and military contractors might think of the weather servers as an indirect route to gain control of military servers.

Fossil fuel energy suppliers, such as the companies behind proposed oil pipelines, might want to disrupt the flow of weather data to delay climate statistics. The delay would be only a matter of days or weeks, but that would still be long enough to matter for commercial groups wanting to manipulate the political process to create favorable legislative action or forestall unfavorable action.

Of course, the real reason for a well-funded weather data disruption could just as easily be something that is not so obvious.

Friday, November 14, 2014

Penalized: Six banks that worked together to manipulate currency exchange rates will pay a few billion dollars in fines to settle their involvement in the scheme. Citigroup and JPMorgan Chase are each paying an estimated $1 billion in fines to regulators in three countries, with Bank of America, UBS, Royal Bank of Scotland, and HSBC paying smaller amounts. Barclays refused to settle and other banks remain under investigation.

Bond fund manager Pimco is expected to lose a third of its funds under management over the next two years, and this could cause short-term difficulties in managing its funds. Customers worry about Pimco after two years of lackluster performance followed by the unexplained exit of two top executives. Pimco saw $50 billion in outflows in October, and net redemptions may continue at half that pace even if the company faces no further hurdles in the months ahead.

Thursday, November 13, 2014

An agreement on ebook terms between Amazon and Hachette was announced this morning. In the announcement, the online bookseller and the major publisher described the resolution only in the vaguest terms, so we really have little idea on what the resolution was. However, some of the statements make clear that the dispute was entirely about ebook pricing and that executives at Amazon had given the ebook division the power to throttle the sales of Amazon’s print book division. It shows how committed Amazon is to its proprietary ebook format and platform.

Looked at through a traditional business management lens, this is a bizarre situation. Amazon’s ebook division has never made money and does not appear to have a long future ahead of it. Its print book sales operation is generally said to be the only part of Amazon that makes a profit. But it appears that Amazon is willing to sacrifice its cash cow to possibly bolster the long-shot chances of future profits in an area that is still in the experimental stages.

For the larger economy, the most important point is that Amazon was willing to bend on its often-repeated contention that no information product should ever sell for more than US$9.99. Under the new deal, Hachette ebooks at Amazon may sell for higher prices than that. Hachette is giving up some, or perhaps most, of its profit margin on ebook sales at Amazon, but that is not a major concession. A publishers’ profit from Amazon’s ebook platform, if they make anything at all, is generally not enough money to care about.

Although Amazon’s public statements would try to persuade you that it was standing on principle, its arbitrary US$9.99 price ceiling is really just the latest expression of the old, dare I say medieval, idea that workers shouldn’t be paid for their work. This position has been a public relations disaster for Amazon, and rightly so. This morning on Twitter, some of the most repeated comments were the ones suggesting that readers might have an easier time buying books from independent booksellers, which don’t have the same history of trying to squeeze authors out of the book business.

There is one more lingering bitter aftertaste in today’s announcement — it is only a temporary truce in an ongoing dispute. Without specifying the expiration date, Amazon made clear that its deal with Hachette would last just a few years. It sounds just like those deals between cable carriers and TV channel owners. When you hear those deals announced, restoring a channel that had gone dark on your television, you can be pretty sure that same channel will be going dark again a few years later.

Monday, November 10, 2014

Catalonia voted on the question of independence, and while it was more of a straw poll than an official ballot question, the results seem to indicate a strong case for independence. The preliminary results show 81 percent in favor of the ballot’s two questions. The central government in Madrid tried all year to block the vote, but courts did not always take its side. Voter participation was close to 50 percent, high enough to make the case that the voting results represent a solid majority in favor of independence, but not nearly enough to form a mandate. Many voters were kept away from the polls by threats of violence from the central government, but the confrontations never materialized.

The idea of independence might also be helped by the latest polls from Scotland, which show that most voters there would support independence if they could vote on that question now. Independence in Scotland was defeated after a series of extravagant promises from London, but most of those promises were abandoned in the three days after the vote. It is quite a different picture in Madrid, where the government says Catalonia will never gain independence no matter how many citizens support it. The brittle posturing in Madrid means that something will have to break sooner or later. A nation cannot be perpetually in conflict with its most prosperous colony.

Saturday, November 8, 2014

The concept of a “smart” or adaptive electric grid is still years away, but already there are problems. The first tentative step toward a smart grid is the installation of smart electric meters, and there are growing pains even at this stage. Dozens of smart meters have caught fire or exploded, causing concern about the potential for building fires. I have heard reports of this problem in Hawaii and California, and of incidents near here in Philadelphia, but the defective smart meters have become the greatest obstacle in Saskatchewan. There, there have been nine reported “smart meter failures” among only 105,000 installed in a pilot program, a failure rate so astonishingly high that the province has ordered all of the smart meters removed. Here is the report of the latest meter fire from CBC News:

The design problems with smart meters will be fixed soon enough, but the extent of problems shows that even these initial, rudimentary steps can’t be taken for granted. We have to get the first pieces working before we can go on to the next step after that.

Friday, November 7, 2014

Luxembourg is a country half the size of the U.S. state of Delaware. The comparison is significant because, like Delaware, Luxembourg is the nominal seat of countless corporations that do not necessarily do business there. Many of these Luxembourg-based corporations are household names. Many are shadowy operations where it is impossible to tell what exactly the corporations do or even who their owners and officers are. Many are both.

Luxembourg fell reluctantly into the spotlight this year with the spectacular collapse of the Espírito Santo commercial empire in Portugal, which had owned one of Portugal’s largest banks, Banco Espírito Santo. The dominoes started to fall when one of the bank’s parent companies filed for bankruptcy in Luxembourg. There were assurances that the bank was not affected by the bankruptcy, but those proved false, and within weeks, the bank too had failed. The blanket of secrecy that Luxembourg allows corporations to operate under had made it possible for both the Luxembourg-based holding company and its Portuguese banking subsidiary to obscure their true financial condition for years — perhaps as long as 12 years, investigators in Portugal think. The same blanket of secrecy is complicating the bankruptcy proceedings, so that it could take courts a year or longer just to determine which company properly owns which assets.

More recently it is the tax avoidance strategies of international corporations that have kept people talking about Luxembourg. A major parliamentary investigation into tax avoidance by U.K. businesses points to secret deals between U.K.-based businesses and the government in Luxembourg. A smaller U.S. investigation on the same theme has pointed to Luxembourg more than once. European Union investigators are convinced that Luxembourg is breaking EU rules with its secret tax deals with companies like Pepsi, FedEx, and AIG, along with a list of banks including JPMorgan Chase and Deutsche Bank. However, formal action is still pending because Luxembourg authorities, citing secrecy laws, are still stonewalling investigators. Some investigative journalists point to the role of major accounting firms in setting up these secret Luxembourg money funnels. They believe even the government in Luxembourg is being duped by the accountants.

The theme in all this is secrecy, or the lack of transparency. The Luxembourg tax arrangements wouldn’t be possible if the whole world knew about them. Just the way publicly held and even government-owned corporations have kept these tax avoidance schemes under wraps raises questions. The most pointed question: is it even legal for a public company to depend on billions of euros in tax avoidance without ever mentioning this or the associated risks to its owners?

One of the corporate mechanisms for secrecy is the subsidiary, an arrangement in which a corporation that everyone knows about can own another corporation whose existence is almost a secret. Every secret Luxembourg tax deal seems to involve a Luxembourg-based subsidiary, which in many cases does nothing more than own other subsidiaries. Gaps in corporate governance laws allow corporations in many cases to treat subsidiaries as trivial entities — to get all the benefit of the subsidiary while at the same time pretending that it does not exist. Subsidiaries are gaps in corporate transparency. A corporation that is laudably transparent in its own headquarters can still hide a multitude of sins in a foreign subsidiary that no one talks about.

In my opinion, the fuzzy status of subsidiaries, sometimes treated as entities and sometimes not, is the weak point or loophole in corporate law that is being exploited. The tax avoidance schemes and other financial smoke screens would be much harder to arrange if subsidiaries were required to keep records, report results, pay taxes, and face audits like the corporations that they are. This would be an easy legislative change to make, requiring only a few paragraphs of legislation. But the corporate world would lose more than a trillion dollars annually from the loss of their tax shelters, so they will never let it happen.

Exiting bankruptcy: Detroit had its bankruptcy plan approved today. The plan mostly protects creditors, reducing the city’s debts by $7 billion and cutting pensions by 4.5 percent. The court spent two months going over objections one by one, but found little legal basis for them. The court’s main concern was that the plan would still leave the city strapped for cash, but this worry was not enough to persuade the court to reject the plan, which would have directed lawyers to start all over again. In total, Detroit’s bankruptcy case ran for 16 months, a surprisingly short time. While on the subject of municipal bankruptcies, it is worth mentioning that the flood of bankruptcy filings that many analysts expected to see this year did not materialize — although that may simply be because the high-profile bankruptcies that did occur made creditors more hesitant to launch litigation against municipalities in arrears.

Struggling: Executives said it could take 10 years to fix the problems at Standard Chartered Bank, which has struggled with overconfidence, operational difficulties, and repeated penalties for money laundering (and is, the bank confirmed, now facing a third U.S. investigation).

Under investigation: Banking giants’ currency exchange practices are being investigated by authorities on at least three continents, and banks have set aside at least $2 billion to settle those cases. Some reports have suggested that banks manipulated currency exchange rates for short periods of a few minutes in order to pollute the statistics used in other traders’ analyses. A fresh U.K. competition investigation aims to find out whether the big four banks in that country really compete with each other.

Insecure: A criminal group that broke in to Home Depot’s network to steal transaction data didn’t need any advanced techniques, according to new details released by the retailer. The intruders exploited stolen credentials and a well-known Microsoft operating system flaw. Once opened, the network intrusion went undetected for seven months. With retailer networks so wide open, making credit cards themselves more secure won’t make an immediate difference. POS terminals and the associated network software will have to be overhauled before there can be a reasonable level of confidence in the security of retail networks.

Failed: El Paseo Bank, with two locations in Palm Desert, California; $82 million in deposits. Successor is Bank of Southern California.

Sunday, November 2, 2014

Halloween collided with Christmas on November 1. I was out in the shops, which were lively with shoppers, more than twice the usual number. The background music was Christmas carols. But many of the shoppers were doing last-minute shopping, buying Halloween costumes for their Saturday night parties.

The reason for the early Christmas shopping was not to avoid the crowds, but to get the local shopping done before the end of November so that any remaining purchases that had to be made online could be placed in plenty of time. Shoppers who take this approach are just getting started on their intensive three or four weeks of in-store shopping. The result, though, is that there is no place for a gap between the Halloween and Christmas seasons. This weekend, they are overlapping.